Cryptocurrencies focused on privacy have recently captured investors' attention, emerging as some of the most popular token categories. According to CoinGecko, the combined market capitalization across privacy coins has reached nearly $22 billion, with a significant 52.2% increase in value over the past 24 hours. CoinMarketCap, a rival data aggregator, places the category's valuation at close to $55 billion, with Zcash (ZEC) now leading the market.
Zcash, an early entrant in the privacy-focused cryptocurrency space, launched in October 2016. After trading below $80 at the beginning of October, it experienced a dramatic surge of 375% throughout the month, reaching $380 by Halloween. This impressive growth allowed Zcash to overtake Monero (XMR) as the largest privacy token by market capitalization.
The renewed interest in privacy technologies coincides with growing concerns over data surveillance. Governments have considered measures such as the European Union’s “Chat Control” proposal, which could mandate the scanning of encrypted messages, and Meta's decision to resume training AI models on European user data.
Zcash’s Significant Month and the Growth of Shielded Supply
The surge in Zcash and other privacy tokens occurred even as the broader cryptocurrency market grappled with challenges, including U.S. President Donald Trump’s early October tariff threats against China and a substantial $19-billion liquidation event.
However, the trend toward privacy is not solely driven by speculation. It is also marked by an increase in Zcash’s “shielded supply” and a wave of adoption fueled by new wallet technologies that have made private transactions more accessible.
"The focus is shifting toward projects that aren’t launching tokens just for the sake of it, but are building privacy technologies like zero-knowledge systems powered by real incentives. These systems can provide privacy by default without requiring users to make explicit choices about anonymity,” stated Carter Feldman, founder and CEO of ZK-proof-based blockchain Psy Protocol, in an interview with Cointelegraph.
Zcash's privacy model is built around the shielded address, which utilizes zero-knowledge proofs, specifically zk-SNARKs, to conceal the sender, receiver, and transaction amount. Transactions conducted between shielded addresses are pooled together, enhancing the network’s anonymity set and strengthening privacy guarantees for all users as this pool grows.
Currently, the shielded pool for Zcash is at its largest point, approaching 4.9 million ZEC.
To enhance accessibility, Electric Coin Company, the developer of Zcash, introduced new features in its Zashi wallet at the beginning of October. These updates enable users to perform cross-chain swaps and private payments through an integration with Near’s Intents system. This integration allows users to easily transfer value into and out of Zcash’s privacy layer without relying on centralized exchanges or complex bridging interfaces.
The improved ease of use contributed to the expansion of the shielded pool throughout October. Zcash activity on Near Intents saw a significant increase at the start of the month, with over $17 million transacted on October 16 alone.
However, this surge is not without its concerns. Investigator ZachXBT highlighted that Zashi’s integration with Near Intents might not fully obscure transaction paths, suggesting that cross-chain privacy still has traceable elements. ZachXBT stated that the Zashi team plans to address this privacy issue by implementing ephemeral addresses soon and eventually shielded Near Intent refunds.
Zcash Surges Amidst Global Privacy Trends
Globally, privacy has become a central theme in policy and technology discussions. Governments are introducing controversial surveillance proposals, while companies are increasingly utilizing data-hungry AI models.
“Regulatory scrutiny has paradoxically clarified the value proposition for compliant privacy solutions,” commented Marko Stokić, head of AI at Oasis Protocol, to Cointelegraph. He added that the industry is actively developing methods to implement privacy in ways that serve legitimate user needs while maintaining accountability, driving demand for programmable privacy solutions.
In Europe, EU lawmakers have, for the time being, stepped back from the contentious “Chat Control” proposal, which would have compelled messaging services to scan encrypted chats for illegal content. Concurrently, Meta has begun training its generative AI models using European users’ Facebook and Instagram data, assuring that private messages will not be included in this process.
In the United States, privacy regulations remain fragmented. While states like California, Colorado, and Virginia have enhanced privacy protections, federal efforts to pass a nationwide law have stalled.
These global developments have amplified both apprehension and interest in digital privacy. As governments explore invasive monitoring tools and companies continue to collect vast amounts of data, privacy technologies are being reimagined as significant market opportunities.
“The biggest misconception is conflating privacy with criminality or assuming compliance and privacy are mutually exclusive. Well-designed systems can protect sensitive information during normal operations while remaining auditable when necessary,” Stokić explained.
Why Privacy Matters More to Crypto Users Now Than Ever Before
Historically, anonymity in the digital realm was primarily associated with cypherpunks and traders who harbored distrust towards regulators.
“Privacy isn’t some niche feature for people with something to hide,” Feldman stated.
“The real misconception is that we have to choose between privacy and usability, or between privacy and scale. The technology has advanced to the point where we can have both.”
Presently, the cryptocurrency landscape operates under continuous surveillance, characterized by Know Your Customer (KYC) checks, exchange monitoring, and sophisticated blockchain analytics.
Blockchain forensics specialists employ machine learning to track wallets and construct behavioral profiles. These systems can link identities, map connections between wallets, and predict asset movements to exchanges.
Governments are also intensifying their regulatory oversight. On August 18, the U.S. Department of the Treasury solicited public input on artificial intelligence, blockchain monitoring, digital identity credentials, and “privacy-enhancing tools” designed to detect illicit activities involving digital assets. The agency indicated that this feedback would inform new guidance and potential rulemakings under the GENIUS Act.
Within the EU, crypto exchanges are now required to treat transfers to or from self-hosted wallets as higher-risk activities, necessitating enhanced due diligence, including verification of wallet control. These obligations took effect on December 30, 2024.
For a significant number of users, this combination of pervasive surveillance and heightened scrutiny serves as a clear incentive to explore privacy-focused cryptocurrencies.